If you’re looking for ways to invest in yourself, there’s one great place to start: your financial wellbeing. It can be all too easy to tell ourselves that our finances can wait until another day, or focus our energy on improving our physical wellbeing.
Yet money impacts almost every aspect of our lives, from our work to our relationships and beyond. It’s why investing in your financial health can change your life for the better - so here are five ways you can set yourself up for the future financially, starting now.
Understand your financial situation
When it comes to getting ahead with money, the first port of call is understanding exactly where you are right now. Put it this way: you can’t start driving to the airport to head to your dream holiday destination if you don’t know where you parked your car. It’s exactly the same principle with money, because you can’t reach your financial goals without a clear idea of where you are starting out.
Gather all the information you need to build a full picture of your current situation, including your income, essential expenses and negotiable spending, plus any savings, debt or investments. Once you have a bird’s eye view of your financial setup, you’re in a better position to decide on your next step towards where you want to be.
© Getty ImagesBuild an emergency fund
Whatever stage you’re at in your financial journey, you can never fully anticipate all the unexpected costs that can appear, seemingly out of nowhere. Whether it’s your car MOT that turns into a £500 job, or a dropped phone which winds up with a hefty repair bill, having the money set aside to weather any financial storms that come your way can give you peace of mind. A
nd as far as our financial wellbeing goes, a bit of peace of mind and security can make a huge difference in how we feel about money on a daily basis. It doesn’t matter whether you can set aside £10 or £100 each month to build your emergency fund; the key is simply to start now. You never know when you might need that pot of money.
Get to grips with debt
Dealing with debt can be scary, and there’s often a temptation to bury your head in the sand. Spoiler alert: ignoring a problem doesn’t make it disappear, and hiding from your financial situation only kicks the can down the road. If you do have debt right now and you don’t know where to start in dealing with it, the first step is getting a clear picture of how much debt you have, along with the interest rates you are paying.
© Getty ImagesCredit cards, loans, car finance - it all can add up and be costly, so it’s no surprise if you aren’t entirely clear on how much you owe. Once you have a clear list, work out an order of priority for tackling the debt and look for any ways to reduce your interest costs. Remember that if you feel overwhelmed and need support, debt charities such as National Debtline and StepChange can support you, so don’t be afraid to ask for help.
Pay your pension attention
Dreaming of a day when you can put your out of office on for good? Most of us have aspirations to one day retire and sail off into the sunset, or at least enjoy a few years of slowing down after a lifetime of working hard. But retirement doesn’t come for free and the cost of retirement is on the rise.
The best move you can make to plan your escape from the workplace is paying attention to your pension now. Use a pension calculator to see whether you are on track for your retirement needs financially, or if you need to increase your monthly contributions. Keep in mind that the longer you have until retirement, the more time you have to make your pension pot work hard for you.
© Getty ImagesTalk more about money
Talking about money might still seem like a taboo, but the practical and emotional benefits of opening up about your finances are endless. In a relationship? Financial compatibility is a core ingredient in a long-lasting partnership. You don’t have to see eye to eye on everything, however, having the ability to communicate and respect each other on the topic of money is vital.
In the workplace, salary transparency is one powerful tool in closing the gender pay gap, as it can highlight any systemic issues that allow pay gaps to exist. In fact, the only real downside to talking about money more? The discomfort. Face it head on, and all the benefits of financial openness are waiting for you.
Ellie Austin-Williams is the author of Money Talks, a Lifestyle Guide for financial wellbeing. Find her on Instagram at @thisgirltalksmoney.
